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Business

Deferred oil payment facility from Saudi Arabia expired last month: Ministry of Finance

  • The Ministry of Finance said that the deferred oil payment facility from Saudi Arabia expired on July 9 this year and a request to extend the agreement was being considered with Saudi Arabia.
08 Aug 2020

Ministry of Finance on Saturday said that the $3.2 billion deferred oil payment facility from Saudi Arabia was for one year and could be renewed.

The Finance Ministry spokesman has issued an explanatory statement on the facility of deferred oil payments from Saudi Arabia. The Ministry of Finance said that the deferred oil payment facility from Saudi Arabia expired on July 9 this year and a request to extend the agreement was being considered with Saudi Arabia.

It may be recalled that in October 2018, Prime Minister Imran Khan had visited Saudi Arabia in which it was decided that Saudi Arabia would provide a $12 billion aid package to Pakistan.

A memorandum of understanding was signed between then Finance Minister Asad Omar and Saudi Finance Minister Muhammad Abdullah Al-Jadan, according to which Saudi Arabia has agreed to deposit $3 billion in Pakistan's account for one year, for the purpose to support the balance of payments.

It was also agreed in the agreement that on the basis of deferred payment, Saudi Arabia would provide $3 billion worth of oil to Pakistan annually and this would continue for 3 years after which it would be reviewed.

Under the aid package, the Saudi government also had to keep $3 billion in Pakistan's account, of which the first tranche of $1 billion was received on November 19, 2018, the second tranche on December 14, 2018, and the third tranche on January 25, 2019.

Pakistan has repaid Saudi Arabia $1 billion of the $3 billion given to Pakistan, as confirmed by Foreign Minister Shah Mehmood Qureshi.